Off the southern coast of Malaysia, a futuristic city is rising from the sea. An artificial island, the first of four that will anchor the projected $100 billion Forest City project, has materialized in the Straits of Johor, the channel that separates the Malay Peninsula from Singapore. Three years ago, this was open water. Today, a phalanx of half-built high-rises stretches across the new island, a flock of construction cranes hovering above. When completed, Forest City is expected to cover an area the size of four Central Parks and accommodate 700,000 residents. The metropolis will evoke a high-tech Atlantis, a “smart” eco-city where spacecraft-shaped towers will be draped with greenery, all motorized traffic will flow underground and every inch of the island cluster will be monitored by a state-of-the-art security system. In the words of a promotional video: “It is a pride and dream paradise for all mankind.”

Forest City is billed as one of China’s biggest overseas development projects, but it is hardly the world’s first insta-city. We are, in fact, living in the golden age of the master-planned metropolis. In the last two decades, more than 100 new cities have been (or are being) created from scratch, according to Sarah Moser, an assistant professor of geography at Montreal’s McGill University, where she runs a research lab that tracks new cities. These recent additions to the map tend to arise in developing countries like Morocco, Nigeria, Uganda, Myanmar and Indonesia.
The center of this city-building frenzy is China, where most of the urban landscape has been created anew over the last 30 years. Forest City, however, takes the trend into a strange new dimension. It sits inside Malaysian territory, yet it has been designed, financed and marketed mainly by and for mainland Chinese (and members of the Chinese diaspora). Forest City’s developer, Country Garden, is one of many powerful Chinese real estate companies that have expanded overseas as growth slows at home. Its Malaysian partner is a company controlled by Sultan Ibrahim Sultan Iskandar, royal heir to the 500-year-old sultanate of Johor. Even as the sultan ties his family legacy to the project — his portrait hangs prominently in the sales gallery — he has also afforded the Chinese investors a remarkable degree of autonomy. After all, Country Garden knows exactly how to appeal to the needs and longings of China’s aspirational middle class.

A staff of 70 salespeople in bright yellow golf shirts greets prospective customers, and their sales pitches highlight many reasons Chinese are looking to invest abroad: a clean environment (none of China’s pollution here); a Western education (a Minnesota boarding school will open a Forest City branch this fall); a hedge against an uncertain future (Malaysia offers long-term visas as well as a path toward citizenship). There’s also the comfort of high-level security — retinal scans and facial-recognition cameras — for a population conditioned to think of Big Brother as benign. Nepali guards patrol Forest City around the clock — in part, one salesman said, because Chinese clients might not feel comfortable interacting with local Muslims.

Within a year of putting its initial offerings on the market in December 2015, Forest City had sold 80 percent of all units on the first island. The project is a relatively cheap alternative to property havens in North America, Australia and China itself. A luxury two-bedroom apartment costs only $180,000 in Forest City, about a third of what it would command in Shanghai. Still, the sheer volume in sales means that Forest City raked in more than $3 billion in 2016 alone, according to the company. Much of this money was Chinese flight capital, but Country Garden has tried to make buying into Forest City seem almost patriotic. One Olympic-themed show unit features the gold-medal shooters Du Li and Pang Wei, who have invested here, too. (A sign proclaims in Chinese: “Welcome home, Olympic champions!”) Throughout the sales tour, potential buyers are reminded that Forest City sits in a strategic geographical position for China — astride a vital maritime route that connects their homeland with the rest of the world.

But after a banner year in 2016, Forest City encountered significant setbacks in 2017 — revealing some of the fault lines created by the phenomenal growth of Chinese wealth. The uncomfortable fact that hundreds of thousands of Chinese may soon be residents of Malaysia led a former prime minister, Mahathir Mohamad, to lash out at the project last year. “We should realize that once we sell land to others, we no longer have any ownership over it,” he said. The sultan of Johor accused Mahathir of “playing the politics of fear and race” ahead of nationwide elections in which the former prime minister is running. But Mahathir, 92, railed on. He even compared the situation to the sultanate’s sale of the neighboring island of Temasek to the British nearly two centuries ago. That island is now the wealthy city-state Singapore.

Geopolitics only added to the controversy. Forest City sits just a few miles off the Straits of Malacca, an indispensable channel for commerce ever since the beginning of the global spice trade in the 16th century. Today the straits are China’s Achilles’ heel, a vulnerable choke point through which 80 percent of its oil imports flow. China is building pipelines, ports and railways in Pakistan and Myanmar to relieve its dependence on this waterway. It is also lavishing Malaysia with large investments, like a $7.2 billion port complex in Malacca, to secure its position along the straits. Forest City is not a government infrastructure project, but it is a largely autonomous Chinese outpost in a strategic location. “Where else in the world has a foreign company created new land in another country, populated it with people from its home country and asserted sovereignty over it?” Moser asks. “This is a brand-new level of colonial expansion.”

And yet the greatest blow to Forest City last year was struck by the Chinese government, through a set of new restrictions that underscore the tension inherent in Beijing’s economic vision, in which it encourages companies to “go global” yet fears the exodus of its citizens’ new wealth. Over the last decade, China has seen an estimated $3.8 trillion in capital leave the country, much of it going into offshore real estate. In an effort to crack down on rampant capital flight, Beijing tightened its capital controls, making it nearly impossible for investors to send large amounts of money out of the country. The limit on foreign transfers remains $50,000 a year per person, but now senders must sign a pledge that no money will be used to buy property — and face investigation if they violate the pledge. The tougher controls have strengthened China’s currency and stabilized its foreign reserves, but many Chinese investors, including some Forest City customers, were left stranded: They had made down payments on their tropical idylls, but banks wouldn’t let them send the rest.

Soon after the restrictions were put in place, Country Garden shuttered its Forest City sales offices in China — “for renovation,” a notice said — and scrambled to find new customers in Dubai, Japan, Thailand and beyond. Yu Runze, the president of Country Garden Pacificview, the joint venture that runs Forest City, told Today, a Singapore newspaper, last year that capital controls gave them “an opportunity to shift our sales strategy to be more international.” Forest City hasn’t revealed its 2017 sales figures, so it’s hard to tell just how much its business has suffered.

Still, on a recent Saturday, a few hundred visitors — almost all of them Mandarin speakers — circulated through the sales gallery. They gaped at the sleek scale model with “sold out” towers, tested a facial-recognition camera and ate dumplings at one of the Chinese restaurants. No transactions seemed to be taking place, but outside, the flock of construction cranes kept moving and Forest City continued to rise. “There are so many permutations on how this project can move ahead that it’s unwise to write it off prematurely,” Yu said. “Never underestimate the resolve of a new China.” /•/

recent comments

past daily news

news categories

news articles are reproduced
for non-profit educational purposes
In the end, we conserve only what we love. We will love only what we understand.
We will understand only what we are taught - Baba Dioum